Blog PostJune 3, 2021 - Educational
Building Materials Price Increases – Can a Condo Loan Help?
This blog intends to give as much information as possible on the current issue of building materials price increases, which materials are being affected, and how this may impact condo boards when deciding on when or if to do repairs to the condo. A condo loan may be able to help with the potential increased costs, which vary for the different materials.
This information is compiled from my discussions with engineers, construction managers, and contractors, and is reflective of their opinions and perspectives from within the condo repair industry.
One material that has grabbed a lot of attention is lumber. This applies to a lot of different items within the lumber industry, including basic framing lumber, fencing and sheathing. Sheathing crosses several types of repairs as it may need replacing behind siding or cladding, on decks or balconies, and under shingle roofing.
Urethane based by-products are also on this list as they are connected to different types of coatings used in repairs.
Insulated Glazing Units (IGU’s), which is the glass that goes into aluminium clad windows used in high-rise type condos, are an item seeing an increase.
The base material of vinyl is affecting the production and the price of various products that rely on vinyl, including siding, fencing, and the framing for vinyl windows, which are more common in low rise or town home type condos. I have been told that, for vinyl siding, some manufacturers are not producing some of the less popular colours to keep up production on the more popular colours.
One last observation is that the bids that general contractors put in on condo repair projects now have a shorter limit on how many days from tender to close that their bid remains valid. It was common to have 60 days, but now it is commonly 30 days so that the contractors are not exposed to the volatility of materials price increases.
The question that arises from all this information is: how can a condo loan help the condo boards when faced with an increase above their budgeted repair total? One option is using the condo loan to pay for the increase only, allowing the board to continue with the repairs as they planned. Alternatively, the loan can be used to pay for a portion of the whole repair, with the amount to be decided by the board. As another option, the board could choose to pay the full repair cost, including the increased materials cost, by the condo itself.
I hope this information is useful to the reader, and that it can help with the planning of any repair project that a condo may have during the current situation.
Owner & President of Condominium Financial